From Crikey’s Bernard Keane today:
…The government-controlled Senate Economics committee last night released its report into the bill gutting FOFA and recommended it be passed with trivial changes not to the wording of the bill itself, but, remarkably, the Explanatory Memorandum, to address the issues it acknowledged had been raised by industry and key stakeholders. The majority report was opposed by both Labor senators and the Greens.
The nearest the majority report comes to proposing fixes for problems acknowledged even by groups supporting the repeal is on the reinstatement of conflicted remuneration, which the Financial Planning Association is strongly opposed to and on which even the Financial Services Council has expressed concern.
“Clearly, a number of submitters lodged strong objections to the amendments broadening the exemptions from conflicted remuneration. They came not only from consumer protection groups but from industry groups including CPA Australia and the Institute of Chartered Accountants Australia, FPA, the Australian Institute of Superannuation, AFA, FPSA, and SPAA… the FSC, which supported the amendments, recognised the need ‘for more work’ to be done on the drafting, which ‘requires extra ring fencing’ to ensure that the proposed legislation does not allow the reintroduction of commissions’. Indeed, Treasury officials indicated that commissions ‘was one of the issues that Treasury was working through’.”
Despite that, government senators declined to recommend specific action to fix the problem, instead recommending “that the Explanatory Memorandum make clear that it is not the government’s intention to reintroduce commissions” — a meaningless gesture…the government is bent on giving more power to financial planners and the big banks like CBA at the exact point ASIC’s already-inadequate regulation of the sector will be curbed. Madness.
Correct.
